Smoking ban shows no impact on Scottish sales, says Imperial

Imperial Tobacco, which makes almost half the cigarettes and rolling tobacco smoked in Britain, says it has seen no drop in Scottish sales following the banning of smoking in public places a month ago.

Chief executive Gareth Davis said anecdotal reports from the hospitality trade presented a "confused picture", but "so far we have not seen any effect on our business". A similar ban is expected to come into force in Northern Ireland next April, and throughout the rest of the UK by the summer of 2007.

In Ireland, where a ban was introduced in March 2004, tobacco consumption rebounded strongly after an initial dip, he said. He estimated that cigarette sales volumes had declined about 5% as a result of the ban, but interim results from Imperial yesterday showed they had recovered in the six months to March 31 by 4%. "The smoking ban effect appears to have worked its way out" so Irish smokers still made up 29% of the population - the same as before the ban. Mr Davis suggested growth in Ireland - which runs counter to declining trends across most of western Europe - had been generated by workers from eastern Europe. Other factors included an absence of duty rises and a growth in the Irish economy.

In the UK, Imperial sold 48.4bn cigarettes in the half year, 4.3% less than the same period 12 months earlier. Smokers continued to trade down in price, switching to Imperial's low-cost brands, helping the group to strengthen its leading market share to 45.2%, up from 44.7%. Its Lambert & Butler brand remained the UK's best selling cigarette with a market share of 16%. Its Golden Virginia held a 50% share of the rolling tobacco market. Strong gains in eastern Europe, Russia and Asia helped group sales volumes up 9% to the equivalent of 86.3bn cigarettes. Underlying pre-tax profit rose 5% to £618m.